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From YouTube: Board of Equalization Hearing September 21, 2022
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A
Good
morning
today
is
Wednesday
September
21st
2022.
This
is
the
Arlington
County
Board
of
Equalization
hearings.
Today
there
are
six
cases
on
the
agenda.
The
first
case
we're
starting
with
is
RPC
34027005
at
2611
Richmond
Highway
Mr
Sean
Rayden
is
here
to
speak
on
behalf
of
the
owner.
This
reading,
you
can
start
with
your
eight
minutes
and
tell
us
about
the
product.
B
B
You
know
getting
getting
their
space
leased
and
so
the
main
issue
that
we
have
we're
discussing
today.
It
really
comes
down
to
two
two
two
factors:
one
is
the
amount
of
time
to
lease
up
the
space
and
two
is
the
the
cap
rate
used
by
the
county
this
year
and
so
well
as
we
look
through
our
information
and
I
are
a
general
summary
here
on
page
two
and
three.
C
B
We
used
two
years
in
this
discount,
and
this
is
primarily
because
of
the
the
the
continued
problem.
They've
had
several
years
to
still
achieving
an
extremely
high
vacancy
rate
and
the
the
issue
really
for
this
property
has
been
the
time
of
that
still
is
up
this
space,
so
we
did
a
little
research.
B
Looking
at
the
sub
Market,
we
looked
at
co-star
and
other
data
to
see
how
long
space
was
taking
the
lease
up,
and
what
we
found
was
that
two
years
is
a
more
appropriate
and
even
a
conservative
estimate
to
at
least
this
amount
of
space
and
per
co-star
we're
seeing
that
amount
of
space
could
take
several
years
to
lease
up,
and
so
I
will
go
through
that
information
in
just
a
second
and
then
the
other
issue
is
the
capitalization
rate,
and
what
we
determined
previously
for
this
property
was
that
the
non-metro
cap
rate
was
more
appropriate
with
also
the
Crystal
City
bid
added
into,
and
so
that
was
the
7.343
cap
rate
that
we've
used
and
what
was
determined
appropriate
last
year
as
well.
B
So
We've
included.
You
know
the
the
rent
roll
you
can
see
extremely
high
vacancy
again
and
but
I
want
to
get
to
the
information
from
co-star,
which
discusses
the
amount
of
time
necessary
to
to
lease
up
this
type
of
space,
and
so
that
information
begins
on
my
page
11.,
which
you'll
see
a
report
here
starting
from
co-star,
and
this
is
median
months
on
the
market
for
Crystal,
City
and
other
than
what
they
call
peer
properties,
similar
properties
in
the
sub
market.
And
you
can
see
that
time
is
30.
B
Excuse
me,
33
months
for
the
peers,
31
months
for
Crystal
City
sub
market
and
as
we
go
down
here
months
to
lease.
This
is
vacancy
analysis
here
months
to
lease
by
block
size
of
square
footage,
and-
and
this
is
the
type
of
square
footage
that
we're
looking
for
I've
circled
it
here
from
50
000
square
feet
to
99
000
square
feet
Chris.
You
know,
oh
there's
approaching
30
months
here.
B
and
all
the
indications
that
we've
seen
here
are
are
pointing
to
over
two
years
to
lease
up
this
amount
of
space,
and
so,
as
we
continue
here,
there's
negative
absorption
here,
meaning
that
it's
just
you
know
a
lot
of
square
footage
available
and
and
it's
not
leasing
up
and
so
hurting.
That
further
is
the
fact
that
there's
even
more
space
coming
onto
the
market
and
Subway
space
available,
so
folks
are
looking
to
lease
out
space,
they're,
already
Leasing,
and
often
discounting
that
and
they're
trying
to
get
rid
of
space.
B
And
that's
that's
here
on
page
15.,
you
can
see
that
and
as
we
continue,
we
see
the
construction
activity
and
here
there's
under
construction
over
3
million
square
feet
of
office
space
available
in
the
near
future,
and
so
all
of
that
goes
to
show
that
it's,
it's
actually
severely
hurting
this
property's
ability
to
lease
up,
and
that's
really
the
reason
why
we
added
the
the
time
and
the
discount
release
up
to
24
months
as
opposed
to
the
one
year
I.
B
Thank
you
for
this
opportunity
to
go
through
some
of
this
information
and
I
will
conclude
right.
There.
D
Yes,
thank
you
for
this
property.
We
didn't
really
have
much
that
differed
from
the
the
appellons
pro
forma.
We
do
have
a
difference.
In
the
vacant,
I
mean
the
the
lease
space
they're
using
a
slightly
lower
rate
than
we
have
for
the
leases
in
place.
We
have
an
average
about
33
dollars
per
square
foot.
D
The
range
is
from
29
to
about
38
dollars
per
square
foot.
When
looking
at
the
other
differences
in
this
property,
we
don't
have
much
other
than
the
one-year
lease
up
excess
vacancy
deduction
below
the
line.
I
believe
the
the
board
is
familiar,
that
we
look
at
this
assessment
annually
and
if
the
situation
is
still
present
as
far
as
the
vacant
square
footage,
we
account
for
that
every
year.
D
With
that
we
have,
if
you
have
any
questions
we
are
available.
Thank
you.
D
Oh,
we
did
actually
change
the
cap
rate,
just
referencing
last
year's
board
decision
and
so
everything
else
kind
of
Falls
in
line
this
building
is
built
in
1985,
so
we
did
adjust
that
cap
rate
with
the
bid
rate.
A
A
Both
questions
from
board
members.
E
Thank
you,
since
most
of
this
relies
on
the
probable
absorption
rate
and
how
long
it's
gonna.
F
E
What
happened
and
and
you're
saying
this
is
to
the
appellant
of
course,
you're
saying
that
need
to
write
off
at
least
two
years
worth
of
a
vacancy
to
account
for
slow
absorption.
E
What
happens
if
nothing
or
very
little
is
absorbed
this
year,
and
next
year
you
come
back
with
a
vacancy
percentage
or
square
footage
about
the
same
and
you're
going
to
make
the
same
case
next
year.
Well,
it's
going
to
take
two
years
so
every
year
this
stuff
is
written
off
for
two
years
until
hopefully,
eventually
it
goes
away
or
it's
extremely
manageable.
That
seems
to
me,
like
that's,
an
awful
lot
of
double
counting
into
the
unforeseen
future,
because
you
come
in
on
that.
Please.
B
Well,
we're
looking
at,
in
our
opinion,
the
market
value
as
of
the
data
valuation
and
I.
Think
any
in
in
our
position
is
that
prospective
buyers
would
be
looking
at
how
long
the
the
market
is
showing
will
take
the
lease
this
space
up
and
when
they
are
looking
to
to
make
let's
say
a
fair
market
offer
or
purchase.
They
would
consider
the
fact
that
the
market
is
showing
that
it
takes
over
two
years
to
make
this
adjustment,
and
they
would
use
that
to
remove
value
from
the
bottom
line.
B
But
we
made
that
a
you
know
stretched
it
out
over
two
years
instead
of
three
or
longer,
but
we
feel
that
is
an
appropriate
adjustment
for
this
property.
Based
on
what
we're
seeing
at
the
market
for
that
kind
of
square
footage.
D
Yes,
thank
you.
Don't
really
have
too
much
to
add.
We
don't
consider
the
two
years.
In
any
other
case,
we
ask
the
board
to
confirm
this
at
the
revised
value
of
22
million
30
200..
Thank
you.
B
Thank
you
so
much
and
again,
in
our
model,
we
try
to
address
the
market
concerns
on
on
leasing
up
this
amount
of
square
footage.
It's
shown
that
a
more
appropriate
time
for
lease
up
as
close
as
two
years
or
above
you
know
that
that's
what
the
Market's
bearing
that's,
what
we
believe
would
be
indicative
of
the
fair
market
value
would
be
to
to
use
a
two-year
discount
for
lease
up
as
opposed
to
one
now.
B
We
understand
that
the
county
may
not
use
two
years,
but
just
because
it
may
not
be
the
correct
model
that
is
being
utilized,
I
mean
we
feel
the
two
years
is
more
appropriate
based
on
the
current
market
conditions,
and
maybe
it's
time
that
they
adopt
a
two-year
program
for
this
type
of
square
footage
based
on
you
know
what
we're
seeing
in
the
market.
So
we
would
ask
that
that
you
here
in
this
case,
you
know
we
made
them
made
some.
B
Made
some
adjustments
there
to
to
the
cap
rate
and
I
believe
they
may
have
adjusted
that
in
their
revised
model.
So
as
as
long
as
that's
no
longer
a
concern,
the
real
difference
really
is
that.
A
F
Yes,
I
guess:
first
thing,
I'll
talk
about
is
the
two
versus
one
year
and
I
can't
remember
when
it
was.
But
a
couple
weeks
ago
we
had
this
lengthy
discussion
about
that
exact
subject
and
I.
Think
myself
found
I
was
somewhat
sympathetic
to
perhaps
going
to
the
two
years,
but
that.
D
F
The
first
two
lines,
I
thought,
might
be
more
accurate
than
the
revised
County
and
what
I
did
is
I
took
the
bottom
line
of
the
33
and
then
I
deducted
the
county
below
the
line
of
Productions
ended
up
at
21,
292
700
and
you
know,
I'm,
not
I'm,
not
adamant
about
that,
and
but
I
just
want
to
see.
If
anyone
else
agrees.
H
Oh
I
was
gonna
say
with
Lauren
said
this
two-year
thing
keeps
coming
up
and
it
I
I
do
believe.
It's
legitimate
I
know
where
the
guidelines
are
and
that's
the
equalization
where
we
have
to
stick.
But
it's
something
needs
to
be
really
looked
at
and
and
addressed
going
forward,
but
I
don't
see,
we
can
change.
I
didn't
see
changing
anything
based
on
Equalization
and
the
guidelines
from
their
revised
numbers,
but.
A
Yeah
I
would
agree.
Barnes
I
just
did
the
the
math
on
that
I
mean
you're
talking
about
a
difference
of
thirty
thousand
dollars,
I
I,
don't
you
know
you're
looking
at
gross
potential
and
doing
a
lot
of
adjustments
off
of
it,
so
I
would
not
tend
to
go
that
way.
But,
okay,
that's
just
my
thought.
Mr
mask
and
you
had
your
hand
up
yeah.
E
I
was
just
gonna
pile
on
on
the
two-year
versus
one
year
versus
three-year
personally
I
agree
with
the
Department's
approach,
but
because
it's
such
a
common
point
of
contention
from
appellants
I
would
love
just
us
talking
love
for
the
Department
to
make
some
kind
of
formal
pronouncement
as
to
their
rationale.
I
personally,
I
think
I
get
it
and
understand
it,
but
I
may
be
an
outlier
and
and
somehow
somewhere
they
can't
just
say.
Well,
that's
our
position!
A
Okay
noted
any
other
questions.
A
I
agree
all
right
any
other
discussion,
then
all
right
I
will
move
to
confirm
the
County's
reduced
number
of
22
million
030
200
do
I
have
a
second
motion,
a
second
by
Mr
Hoffman,
all
in
favor,
hey,
it's
unanimous,
the
assessment's
reduced
to
the
County's
revised
number
of
22
million.
Thirty
thousand
two
hundred.
A
B
Thank
you
good
morning.
Well,
you
know
we
have
another
office
property,
which
is
a
sister
property
here,
also
built
around
the
tank
same
time.
This
is
2711
Richmond,
also
known
as
Airport
Plaza
One
a
similar
property
with
similar
issues.
Here
we
try
to
again
keep
our
our
position
very
conservative,
similar
to
the
county
model.
B
Again
we
used
a
similar
or
use
the
same,
the
county
model
for
rent
vacancy
and
election
and
expenses
and
such
again,
the
the
main
concern
here
similarly,
is
that
the
cap
rate,
which
again,
if
the
we're
requesting
a
Metro
cap
rate,
similar
to
last
year,
as
well
as
a
two-thier
period
for
lease
up
based
on
the
market
conditions
that
we
saw
and
discussed
in
the
last
case,
I,
don't
want
to
belabor
this
point.
B
But
again
we
feel
that
the
market
is
indicating
two
years
as
a
more
appropriate
time
for
the
discount
for
Boost
up.
So
we
used
the
two
years
in
our
model,
based
on
the
same
data
that
we
found
for
the
property
next
door,
and
that
is
also
here
for
you
in
this
paperwork
that
we've
provided
beginning
on
my
page
17,
where
we
we
begin
to
show
the
market
conditions
the
amount
of
time
that
it
takes
to
lease
up
this
kind
of
square
footage.
B
Again,
we've
shown
that
the
data
indicates
that
more
than
two
years
is.
Is
you
know
the
time
that
it
would
take
to
lease
up
this
kind
of
square
footage
again,
there's
issued
with
more
square
footage
coming
online
square
foot
is
not
being
leaked.
B
Things
of
this
nature,
sublease
square
footage
going
up.
So
all
of
this
making
it
difficult
it's
at
least
the
square
footage
and
adding
to
the
time
that
it
would
take
to
Lisa
up,
and
so
again
we
built
our
model
conservatively
using
all
of
the
county
data,
except
for
changing
the
cap
rate
to
the
non-metro
cap
rate
and
then
adding
one
year
to
the
discount
for
Lisa
after
those
values
are,
are
put
into
our
model,
which
you
see
on
my
page.
D
Yes,
thank
you
here.
We
have
a
similar
case.
This
building
is
slightly
older
at
1981,
so
there's
a
slight
difference
in
cap
rate
based
on
I,
guess
the
similar
understanding
that
the
Metro
non-metro
cap
rate
was
used
with
the
bid
rate
we
kind
of
share
the
same
rental
rates
or
vacant
and
Lease
square
footage,
there's
slight
difference
in
what
they
feel
is
vacant
versus
what
they
reported
in
the
2021
rent
roll.
D
So
there's
a
slight
difference
there
in
the
allocation
of
square
footage,
but
overall
the
main
difference
again
is
the
one
year
versus
two
years.
With
that
I
asked
that
the
original
assessment
be
confirmed.
We
did
show
in
the
test
it
it's
slightly
higher
based
on
the
numbers
that
we
came
up
with,
but
we
asked
the
board
to
confirm
the
original
assessment
on
this
case.
Thank
you.
A
F
D
D
When
we
look
at
the
new
numbers,
this
is
originally,
we
had
a
higher
per
square
foot
rate
on
the
original
assessment
when
we
tested
well
there's
actually
a
combination
of
28.75
for
the
leases
in
place
and
then
I
believe
2770
was
a
combination
of
rates
there.
But
when
you
break
it
down,
our
test
is
more
accurate
and
it's
given
more
of
the
2021
information
that
we
received.
F
D
F
D
G
G
A
wrong
category:
yeah,
look,
you
also
change
the
operating
expenses
and
that's
why
this
number
ends
up
lower
operating
expenses
for
the
test
you
know.
So
the
question
is:
should
we
be
using
950
for
operating
expenses
in
the
test
column
and
that
number
ends
up
becoming
lower.
F
E
Through
the
department,
it's
not
the
numbers
I'm
talking
about
it's
more,
the
method,
method,
ugly
in
the
test
column,
a
row
of
other
row:
five,
the
history
is
an
other
whatever
it
may
be,
I
just
trust.
It
exists.
E
But
in
2021
the
most
recent
year,
it's
the
low
70
thousands
and
in
the
test
you
took
that,
whereas
we
hear
a
lot
that
you
try,
if
you,
whenever
you
can
to
not
just
take
last
year's
number,
but
rather
the
trend
and
here's
three
years
Trend
in
the
mid
high
30
thousands
and
only
one
year
last
year,
almost
double
that
about
double
that
and
that's
the
one
you
put
into
your
test.
Now
it
doesn't
change
the
test.
Number
I'm,
not
quibbling
about
the
dollars
but
again
methodology.
Why?
D
Yes,
thank
you
just
trying
to
do
quick
calculations,
so
in
this
test,
if
we
were
to
level
it
out
the
I
guess
the
other
income
would
be
closer
to
forty
five
thousand
nine
hundred
and
then,
if
you
adjust
the
expenses
to
950,
if
the
board
feels
compelled
to
do
so,
I
believe
the
noi
would
be
still
similar
to
the
original
assessment.
D
In
fact
it
it
would
probably
be
higher
without
doing
the
the
total
calculations,
but
going
down,
including
the
excess
vacancy,
as
well
again
we're
using
annual
assessment
for
this
case
as
well
as
other
cases.
We
do
look
at
the
one-year
excess
vacancy
to
the
point
that
Ken
made
on
the
earlier
case.
The
reason
why
we
don't
adjust
for
two
years
is
simply
that
if
they
lease
up
a
subsequent
year,
then
we've
already
allocated
two
years
for
that
assessment.
Giving
that
discount.
Thank
you.
Okay,.
B
Yes,
thank
you
so
much
and
you
know
I
appreciate
you
know
all
the
discussion
and
I
think
what's
clear
here.
I
mean
the
cap
rate
that
we're
requesting
I
think
is
the
appropriate
cap
rate.
Just
you
know,
it
doesn't
make
sense
to
us
that
we
would
be
using
the
lower
cap
rate
when
it's
clear,
it's
the
non-metro
and
it
may
have
been
a
mistake
originally
or
what
have
you
I'm,
not
sure,
but
you
know
I
just
feel
like
we
really
should
be
looking
at.
You
know
the
higher
cap
rate
that's
appropriate
for
this
building.
B
We
also
feel
a
longer
discount.
We
discussed
that,
but
you
know
essentially
I
think
it
would
be
fair
to
have
us
use
the
proper
cap
rate
in
this
case.
So
thank
you
so
much.
We
appreciate
your
consideration.
E
I'm,
going
back
and
forth
at
firstman
Barnes
brought
up
to
get
used
the
right
cap
rate
for
the
original
assessment,
but
then
I,
thought
and.
I
E
Run
numbers
it
comes
out
to
just
over
17
million
I
I
kept
the
noi
at
the
higher
rate
and
deduct
everything
else
the
same,
but
then
I
was
thinking.
This
is
for
us
to
discuss.
Of
course,
I
was
thinking
that
well,
no,
the
the
test
is
better
numbers
based
on
2021
input,
maybe
minus
the
Thirty
or
forty
thousand
dollars
of
other
over
count
and
and
you.
I
E
With
the
original
assessment
I'm
torn
on
this,
but
I'm
coming
down
to
the
original
assessment
or
the
test,
you
don't
mix
and
match
because
the
again
the
test
has
better
overall
numbers.
So
that's
I,
guess
that's
right
from
60
40!
That's
where
I
came
down!
Yeah!
Okay,.
F
Let
me
share
a
thought
with
Ken:
can
he
here's
what
I
think
is
wrong
with
that,
and
is
that
you
know
the
the
expenses
is
at
9.50
and
70
vacancy,
or
maybe
it's
65
I,
don't
know
whatever
it
is,
but
it's
a
huge
vacancy
and
so
on
other
cases,
we've
upped
the
expenses
based
on
the
fact
that
once
this
gets
more
at
least
there's
going
to
be
higher
expenses.
H
Is
generous
in
that
nine
dollars
is
still
way
more
than
the
history
and
the
expenses?
That's.
H
H
A
Right
but
I
I
think
just
to
jump
in
here.
I
agree
with
Ken
on
this
and
and
Mark.
You
know
when
you
appeal
it
opens
up
the
case
and
you
know
we
get.
All
of
you
know
the
information
and
more
current
information.
So
I
think
the
county
is
correct
in
adjusting
the
cap
rate
on
the
test,
but
you
do
have
better
information,
you
have
better
numbers,
and
so,
when
you
do
adjust
for
that
I
you
know,
and
it
comes
out
higher
I
think
the
County's
right
to
say
right.
A
A
F
A
The
numbers
yeah,
okay,
all
right.
Well,
that
being
said,
then
I'm
gonna
move
to
confirm
the
county
at
17
million
eight
twenty
three
five
hundred
do
I
have
a
second
yeah
come
on
Mark
all
right
got
a
lot
of
you
I'm
going
to
go
ahead
and
pick
Mr
metzkin
there
is.
He
was
the
closest
tip,
so
all
in
favor
once.
A
A
J
Yes,
thank
you,
madam
chairwoman.
Members
of
the
board
members
of
the
county
good
morning,
3100
Clarendon
Boulevard,
is
a
261
000
square
foot.
Building
it's
at
the
intersection
of
Clarendon
and
Washington
Boulevard
directly
across
from
the
Clarendon
Metro
Station.
The
2021
assessment
represents
a
three
million
dollar
increase
over
the
2021
value.
The
board
set
for
this
property
of
90
million
600
000..
J
The
county
test
represents
an
18.6
million
dollar
increase
over
the
2021
value.
However,
this
property
is
not
in
a
better
position
as
of
the
data
value
2022
than
it
was
one
year
prior.
In
fact,
we
now
have
a
third
year
of
stable
income
at
right.
Around
5
million
dollars
reported
we're
able
to
more
accurately
gauge
what
the
actual
value
of
the
property
is.
Why
is
a
three
million
dollar
increase
in
assessed
value
incorrect
for
this
property?
J
J
J
J
We
have
to
ask:
why
would
the
owner
enter
into
this
Arrangement,
knowing
that
the
previous
tenant,
a
similar
co-working
company,
had
failed
in
the
space?
Several
reasons
underpin
this
decision.
First,
the
property
has
an
additional
50
000
square
feet
of
vacant
space
already
adding
the
Forty
thousand
square
foot
that
was
built
out
for
the
prior
co-working
tenant
to
the
vacant
stock
would
not
improve
the
outlook
for
the
property
and
keeping
the
space
occupied
does
not
limit
the
property's
ability
to
lease
to
any
other
tenants
who
may
emerge.
J
Essentially,
there
is
no
opportunity
cost
to
signing
this
tenant
to
a
percent
rate
lease.
Second,
the
owner
hoped
with
the
hybrid
work
models
that
have
been
in
place.
Having
the
co-working
space
available
would
entice
new
tenants
for
the
other
vacant,
Office
Space,
with
the
assumption
that
tenants,
knowing
that
they
could
easily
ramp
up
their
space
as
needed
by
utilizing
this
co-working
space,
would
make
the
property
more
attractive.
J
Third,
the
owner
is
seeing
the
same
data
we
all
are
office.
Absorption
in
the
county
has
been
negative
over
the
past
two
years
and
a
tenant
on
a
percent
rent
lease
is
better
than
no
tenant.
Finally,
the
tenant
agreed
to
take
the
space,
as
is
so
turnover.
Costs
were
minimal,
so
the
Forty
thousand
square
feet
was
re-let
to
another
co-working
space
on
a
percent
rent
lease
requiring
this
company
achieve
a
minimum
income
before
any
rent
is
due.
What
have
they
paid
on
this
lease?
As
of
the
data
value,
and
what
is
the
Outlook?
J
This
company
has
not
paid
any
rent
on
the
40
000
square
feet
of
lease
space.
As
of
the
data
value,
given
the
current
market
demand
for
this
type
of
offering,
with
co-working
companies
continuing
to
falter
and
go
bankrupt,
the
owner
does
not
anticipate
the
company
reaching
any
reaching
the
minimum
income
thresholds
that
trigger
rent
payments
in
2022..
J
The
board
reduced
the
value
of
this
property
to
90
million
six
hundred
sixty
eight
thousand
at
the
hearing
last
year.
The
county
claims
this
property,
despite
entering
into
a
lease
for
forty
thousand
square
feet
that
has
yet
to
generate
any
income
is
now
worth
18.6
million
more
the
Appellate
appellants
column.
On
the
summary
page,
calculates
income
based
on
leases
in
place
uses
actual
prior
year
pass
through
parking
and
other
income.
J
We
impute
operating
expenses
at
a
rate
that
is
the
same
as
the
county
and
adjust
the
cap
rate
to
reflect
the
increased
riskiness
of
the
property
due
to
the
tendency,
the
market,
absorption
and
the
reduced
value.
Add
of
Metro
proximity
due
to
both
work
from
home
policies
and
metro
running
far
less
frequent
trains.
J
The
property
is
not
worth
3
million
dollars
more
on
January
1
2022
than
one
year
prior,
largely
due
to
being
contractually
signed
to
a
lease
on
a
percentage
rent
basis
for
40
000
square
feet
of
office.
Space
that
has
yet
to
reach
the
minimum
thresholds
and
is
not
anticipated
is
not
anticipated
to
pay
any
rent.
As
such,
the
taxpayer
respectfully
requests
the
assessment
be
reduced
as
set
forth
in
the
appeal.
Thank
you
and
Eileen.
Do
you
have
anything
you'd
like
to
add.
D
Yes,
thank
you.
For
this
case,
Mr
Harmon
pointed
out
that
you
will
Clarendon
was
a
a
tenant
previous,
their
lease
was
set
to
expire,
1231,
2028
industrious
lease
started,
4-1
20,
20
21..
So
in
this
case
he
did
mention
that
it
was
sublet
to
industrious
if
I
heard
him
correctly
so
they're
receiving
rent
previously
from
U
of
Clarendon
and
their
rate
for
2021
was
46.54
cents.
D
Industrious
is
saying
that
Mr
Harmon
is
saying
that
they're
on
a
percentage
lease
and
that
information
I
didn't
see
in
the
packet
itself.
That's
new
information.
If
I'm
not
mistaken
there,
either
I
didn't
get
a
chance
to
take
a
look
exactly
what's
in
the
case
for
industrious
if
that
was
related
to
the
department
or
not.
D
But
when
looking
at
this
case,
we
did
see
that
the
original
2021
versus
the
test
there's
a
difference
there
of
the
gross
potential
and
I'll
try
to
point
that
out
and
I
did
point
it
out
in
the
summary
sheet
where
the
owner
did
not
report
any
income
for
the
industrious
space,
as
Mr
Harmon
pointed
out
for
deep
root
analytics
for
primer
Federal.
D
So
and
that's
this
gross
potential
income
that
they're
stating
for
operating
year,
2021,
isn't
indicative
of
a
gross
potential
as
I
noted
there
and
then
line
one
column,
E
Line
one,
it's
an
actual
income
that
was
reported.
It
is
in
a
gross
potential.
I
didn't
do
a
reconstruction
of
the
column
e,
but
had
I
done
that
you
could
see
what
the
actual
gross
potential
of
this
property
was
as
of
2021.
When
we
retest
this
this
property,
we
do
find
that
the
the
vacant
square
footage
the
appellant
and
Department
agree
at
35
dollars
and
nine
cents.
D
There's
a
difference
there
in
what
they
feel
is
vacant
is
retail
versus
office
I
believe
the
appellant
included
the
stretch,
smart
square
footage,
which
is
you
know
to
my
understanding,
retail
clients
come
in.
They
they
pay
to
get
stretched
and
so
I
believe
it's
retail
and
that's
why
the
square
footage
difference
is
there
with
respect
to
our
column,
F
versus
the
appellants
column,
G,
and
looking
at
the
differences
in
vacancy,
we
agree
at
20
percent.
D
As
of
the
the
first
of
the
year,
forty
nine
thousand
five
hundred
five
fifty
nine
square
feet
was
vacant.
We
do
agree
at
nine
dollars
a
square
foot.
The
history,
as
you
see
it,
going
back
to
2018
is
7.35
all
the
way
to
2021
and
7.18
cents,
so
we're
still
at
the
nine
dollars
accounting
for
any
lease
up.
D
This
figure
is
actually
smaller
than
what
we
saw
in
the
last
case
and
we
were
about
50
000
square
feet
vacant
on
this
property,
and
so
when
we
look
at
the
rent
roll
further,
if
the
board
may
take
a
look
at
what
we
found
in
the
rent,
roll
on
average
we're
at
48.34
cents
and
the
most
recent
leases
2021
leases
were
at
forty
nine
dollars
per
square
foot.
D
E
You
may
have
two
questions
about
the
cap
rate.
First,
one
is
the
department,
please
turn
to
page
two
of
105
number,
four
capitalization
rate
the
Department's
written
that
the
appellant
states
that
the
way
the
department
sets
cap
rates,
Metro
proximity,
but
more
particularly
effective
age
and
I'll
quote
it's
not
a
recognized
or
crude
method
by
any
professional
appraisal
organization.
E
D
I
believe
every
jurisdiction
does
it
not
to
the
same
effect
as
the
county,
Arlington
County.
We
have
the
ranges
that
that
we've
set
forth
before
we
actually
had
the
history
of
this.
D
The
cap
rates
in
Prior
years
dating
back
to
the
Tommy,
the
Tommy
era,
as
the
Director
we
used
to
have
just
you
know,
even
wider
ranges
for
cap
rates
I
believe
there
was
a
subsequent
hearing
that
had
happened
and
moved
to
adjust
it
and
make
it
tighter,
as
if
you
will
I
believe
we
have
four-year
increments
that
we
have
on
the
guidelines.
Currently,
so
effective
age
has
always
been
a
determining
Factor
when
we're
looking
at
the
the
cap
rate.
Well,.
E
D
Well,
they
have,
they
have
a
similar
Fashion
on
how
they
deal
with
that.
I
can't
speak
to
exactly.
You
know
the
methodology
they
use,
but
every
every
appraiser
considers
effective
age
as
part
of
the
the
calculation
when
valuing
a
property.
E
E
Second
question
for
the
appellant,
so
you
have
a
different
cap
rate.
What
did
you
base
that
of.
I
A
I
I
Well,
we
look
at
the
stability
and
duration
of
the
income
stream,
because
that
is
what
the
market
looks
at.
They
look
at
the
risk
associated
with
a
particular
property
in
this
particular
instance,
because
the
board
has
been
basically
wed
to
the
methodology
used
by
the
county.
We
adjusted
the
cap
rate
for
risk
associated
with
the
property
and
the
stability
and
duration
of
the
income
stream,
as
well
as
the
Metro
proximity
is
important,
as
it
once
was
in
terms
of
Leasing.
E
D
Yes,
thank
you
yes,
so
again,
when
looking
at
this
property,
the
2021
indeed
does
not
report
income
that
should
be
attributable
to
the
Future
gross
potential
of
this
property
in
in
the
Department's
test
column
F.
We
do
account
for
those
the
income
that
was
not
reported.
D
We
don't
differ
as
far
as
the
rates
used
for
the
vacant
square
footage
or
for
industrious
space.
That
was
in
question
in
the
the
introduction
of
the
case.
Mr
Harmon
we're
at
the
same
rate
as
they
use
for
that
percentage,
rent,
so
they're
using
35
dollars,
Point
3509
we're
using
the
same
3509
again
we
differ
in
the
the
square
footage
amount
used
for
the
allocation
of
retail
versus
office.
We
do
ask
the
board
to
to
look
at
the
test
and
and
really
understand
that
you
know
with
the
new
information.
D
J
Thank
you,
I'd
like
to
address
the
rent
on
industrious.
First
Mr
Peralta
has
taken
some
extreme
liberties
with
how
he
has
inferred
that
we
imputed
range
you
can
see
to
the
right
of
the
industrious
rent
he
has
Drea
inferred.
We
did
not
report
it
that
way.
That
is
an
incorrect
inference
by
the
county.
We
imputed
it
at
the
actual
rent,
which
is
zero
dollars.
That's
the
income,
that's
attributable
to
industrious,
and
that
is
the
issue
of
this
case.
You
can
see
the
counties
imputed,
1.4
million
dollars
to
industries.
J
That
is
not
the
same
as
what
the
appellant
submitted.
That
is
not
the
contract.
You're
in
that
is
not
in
accordance
with
state
law,
which
requires
that
we
consider
contract
rents.
When
imputing
economic
grid,
we
provided
a
rent
roll
with
current
grants
that
Mr
Peralta
said
were
not
provided.
We
did
provide
that
on
July
22nd
2022.
There
is
no
chance
for
a
county
hearing
to
explain
any
of
the
nuances
that
he
has
brought
up
as
issues.
But
again
the
main
issue
on
this
case
is
how
to
handle
industrious.
Thank
you.
I
G
Four
years
this
property's
ever
gotten
up
to
six
million
in
noi,
so
that's
kind
of
my
first
red
flag.
You
know
last
year
it's
reporting,
5
million
I,
think
we
really
need
to
see
the
income
from
industrious.
You
know
reported
as
an
actual
before
you
could
start
to
count
that
it's
going
to
be
a
million
or
you
know
it's
going
to
contribute
that
much
to
nmi.
E
G
Comes
down
to
that
difference
on
potential
income,
and
we
haven't
seen
it
happen
yet
right
so
I
mean
5.8
noi,
it's
better
than
2019,
but
it's
and
it
would
also
be
a
record-breaking
year
for
this
building,
so
I
think
that's
a
pretty
fair
number
to
go
with.
We
just
need
to
go
back
and
use
the
guideline
attack
right.
We
can't
break
yeah.
F
E
The
the
appellants
column
G
has
the
imputed
income
from
industrious
the
same
as
the
GRE
test
and
F.
So.
A
G
E
Let
me
follow
up
on
just
when
I
get
clarity,
though
I
understand
it's
percentage
red
and
if
they
don't
make
certain-
and
that
happens
in
retail.
A
lot
yeah
over
and
above
some
basement,
which
is
usually
lower
and
they
haven't
met
the
threshold
to
pay
the
rent.
But.
G
E
We
looking
question:
aren't
we
looking
at.
H
E
G
J
G
G
I
would
say
you
don't
count
that
income
until
they
sell
it
until
next
year.
Okay,
we
made
200
000.
We
got
a
check
from
investors
for
200.
That.
D
F
G
G
I,
like
I,
like
G
with
the
with
the
County's
cap
right,
but
I
mean
you.
E
G
Also
just
make
the
adjustment
on
the
column
F
and
what
the
final
number
of
the
development
87
793
300.
E
C
Mary,
we
have
wait.
A
A
F
A
Okay,
here's
what
I
did
I
took
the
test
column
and
I
just
removed
the
1.34
394
and
then
carried
it
down
and
did
the
20
and
kept
the
expenses
where
they
were
and
I
come
in
at
91,
345
398.
C
I
pretty
much
took
a
little
different
approach,
but
it
comes
up
the
number
that
is
close
to
yours.
What
I
do
is
I
use
the
test
column,
but
instead
of
using
the
45
44
of
office,
the
weight
I
use
the
3509.
So
that's.
Why-
and
you
know
we
doing
all
the
numbers
except
making
that
change.
Only
the
final
value
I
come
up
with
is
91
million
854
900.
F
You
came
up
with
I,
don't
know,
I
think
any.
D
D
F
The
87
million,
but
if
that's,
if
there's
not
a
majority
of
that
figure,
then
I
would
go
with
the
tour.
D
H
H
F
A
A
This
case
there
was
a
settlement
offer
accepted
last
night,
so
this
will
not
be
heard
today.
So
that
comes
off
the
agenda
and
then
assuming
we
can
still
go
on.
It's
only
10
o'clock,
RPC
one
five
zero,
seven
one
zero
three
one
at
3101,
Wilson,
Boulevard
's,
got
that
case
up
then
Mr
Harmon.
You
can
start
with
your
eight
minutes
and
tell
us
about
that
property.
Sir.
J
Yes,
thank
you,
3101
Wilson
Boulevard.
This
property
is
caddy
corner
across
the
Clarendon
Metro
from
3100
Clarendon,
which
we
just
just
discussed.
This
property
is
a
212
000
square
foot,
building
built
in
2002.,
despite
vacancy
being
five
percent
higher
than
one
year
prior
and
ten
and
one
tenant
renewing
a
lease
at
a
rate
that
is
seven
percent
lower
than
their
previous
rent.
The
assessment
represents
a
2.7
million
dollar
increase
over
the
2021
assessment.
J
J
Looking
at
these
issues
in
more
detail,
we
see
that
one
tenant
exercise
their
early
termination
option
option
in
2021
and
paid
a
lease
termination
fee
of
four
hundred
eleven
thousand
dollars.
We
noted
this
on
the
appeal
filed
with
the
county
and
did
not
include
the
fia's
income.
Since
this
money
is
a
one-time
fee,
no
income
was
due
as
of
the
date
of
value.
The
fee
is
not
repeatable
and
no
Market
participant
would
capitalize
such
a
one-time
fee.
J
The
Drea
summary
page
includes
lease
termination
fees
as
other
income
on
the
2020
and
2021
columns.
This
is
not
the
correct
way
to
report
this.
As
of
the
data
value,
the
county
included
lease
termination
fees
as
other
income
on
the
assessment
and
then
capitalize
this
into
the
final
value.
This
results
in
an
increase
of
6.2
million
dollars,
essentially
due
to
speculating
that
previous
year,
lease
termination
fees
will
continue
in
perpetuity.
J
Essentially,
the
property
is
more
valuable
because
there
are
fewer
tenants.
The
County's
approach
also
does
not
account
for
which
tenants
are
anticipated
to
vacate
and,
as
such,
double
counts.
The
income.
The
county
makes
no
adjustment
to
account,
for
which
tenants,
they
believe
will
be
exercising
their
early
termination.
They
don't
adjust
the
income
or
vacancy
portions
of
the
assessment,
seemingly
implying
that
no
tenants
will
vacate
early.
Yet
some
tenants
will
pay
a
lease
termination
fee.
This
doesn't
make
sense
if
the
county
is
going
to
Impe
impute
the
lease
termination
fee
as
income.
J
We
must
follow
the
County's
claim
through
to
the
logical
end
and
find
that
it
is
illogical
prior
year
termination
fee
income
should
not
be
capitalized.
An
example
may
be
Illustrated
of
the
flawed
logic
employed
by
the
assessment.
Take
an
office
building
with
one
hundred
thousand
square
feet
of
nla,
fully
leased
to
two
tenants.
Each
occupying
one,
half
of
the
building
one
tenant
terminates
early
and
pays
a
one-time
termination
fee
of
three
million
dollars.
J
The
County's
logic
is
that
the
building
is
now
more
valuable
than
before,
based
on
capitalizing
this
fee
the
following
year.
Essentially,
the
county
is
stating
that
the
other
fifty
thousand
square
foot
occupant
will
also
pay
a
three
million
dollar
termination
fee,
but
still
occupy
the
building
and
not
terminate
the
lease.
This
posture
is
simply
nonsensical.
J
One
last
Point
regarding
the
termination
fee
income,
this
property
has
had
tenants,
exercise
early
termination
rights
in
both
2020
and
2021.
What
does
this
tell
a
potential
purchaser?
This
tells
a
potential
purchaser
that
tenants
are
leaving
the
building
early
and
why
is
there
something
wrong
with
the
building
something
wrong
with
the
location?
Is
the
market
not
in
great
shape?
What
would
cause
tenants
to
terminate
early?
Yet
the
County's
position
is
that
tenants
leaving
the
property
before
their
lease
end
date
makes
the
property
more
valuable.
J
Next,
the
county
imputes
rent
on
the
vacant
retail
space
at
a
weighted
average
of
the
In-Place
retail
rents.
This
is
not
a
rate
reflective
of
what
the
vacant
space
supports
if
you're
familiar
with
this
building,
you
know
that
the
portion
that
faces
Wilson
Boulevard
consists
of
the
TD
Ameritrade
bank
and
the
building's
Lobby.
The
bank
has
one
of
these
Corners.
The
lobby
occupies
the
other.
The
vacant
space
is
at
the
back
of
the
building.
As
you
go
down,
Highland
Street
past
the
coffee
shop,
which
is
the
only
other
retail
tenant.
J
What
the
county
has
done
on
the
assessment
has
taken
the
average
of
the
bank
retail
rental
rate
in
the
coffee
shop
and
applied
that
to
the
the
worst
retail
space
at
the
property,
which
is
that
again
at
the
back
of
the
building
down
Highland
Street.
Clearly,
the
vacant
retail
space
will
not
rent
for
what
the
average
of
the
bank
and
the
coffee
shop
are
at
next.
The
assessment
fails
to
account
for
the
effects
that
reaching
stabilized
occupancy.
J
In
addition
to
record
inflation,
we'll
have
on
the
operating
expenses.
The
assessment
appears
to
rely
on
the
three-year
average
for
operating
expenses
to
support
the
imputed
rate.
As
stated
on
comment
4.,
however,
note
that
this
three-year
average
includes
year,
2019
shown
in
column
B,
which
is
blank
and
shows
zero
dollars
for
operating
expenses.
This
effectively
skews
down
the
average
significantly.
J
Finally,
here
again,
the
property
is
assessed
with
a
capitalization
rate
that
is
not
reflective
of
of
the
market.
As
of
the
data
value,
the
assessment
imputes
the
exact
same
cap
rate
as
it
did
on
the
2020
assessment.
Apparently,
nothing
has
changed
in
the
office
Market
between
January
1,
2020
and
January
1
2022.
That
would
negatively
impact
the
Capri.
J
J
A
Metro
adjustment
afforded
to
this
property
fails
to
adjust
to
the
work
from
home
environment
and
the
fact
that
Metro
is
running
longer
lead
times
on
trains
during
rush
hour.
Due
to
these
reasons,
the
cap
rate
should
be
higher
in
2022
than
it
was
pre-pandemic
as
a
result
of
the
assessment,
imputing
termination
fee
income
above
Market
retail
rental
rates
below
Market
operating
expenses
and
an
outdated
and
inaccurate
cap
rate.
The
property
is
assessed
over
its
fair
market
value.
J
I
I
Do
by
imputing,
rent
on
vacant
space
and
the
termination
fee.
Basically,
the
county
is
imputing
rent
on
9
000
square
feet
twice,
so
you
either
need
to
reduce
the
potential
rent
on
vacant
space
by
9
000
square
feet
or
take
out
the
cat
take
out
the
termination
fee.
I
The
other
thing
I'd
like
to
say
is
this:
owner
is
in
the
business
of
leasing
space,
not
achieving
termination
fees,
and
it
is
just
ludicrous
to
think
that
the
more
pretendents
that
terminate
in
a
building
the
more
valuable
it
becomes.
Thank
you.
D
Yes,
thank
you
for
this
case.
I
address
all
the
points
that
the
the
pounds
pointed
out
for
the
leases
in
place.
We
have
the
same
per
square
foot
rate
at
48.95,
same
allocation
of
square
footage
when
we
look
at
the
the
vacant
square
footage
we're
at
the
same
rate,
at
45
dollars
per
square
foot,
you'll
see
that
we
did
add
a
column
E2
to
this
board
packet
and
you'll,
see
that
the
potential
gross
income
is
at
the
11.7
compared
to
what
the
appellant
has
at
10,
7.
D
and
I
I
could
agree
with
the
lease
termination
fees
we've
done
this
in
the
past.
We've
seen
this
with
a
a
previous
case
where
you
know
there
was
a
termination
fee
paid,
and
we
account
for
that.
We've
done
this
in
the
past,
where
even
the
appellant
has
mentioned.
Whatever
is
reported
in
the
2021
INE.
D
D
So
again
we
have
done
that
in
the
past
that
if
we
exclude
the
the
square
footage
and
include
it
as
vacant
square
footage,
we
do
include
that
termination
fee
and
there's.
But
if
there's
a
bit
of
a
gray
area
in
how
we
you
know
I
guess
the
board
has
viewed
that
in
the
past.
But
when
looking
at
this
property,
we
actually
don't
have
a
a
difference
in
the
the
vacant
square
footage.
We
both
use
25
percent
for
this
property
built
in
2002.
D
It's
very
Equitable
with
the
other
properties
that
are
assessed
using
that
6.75
cap
rate.
The
appellant
is
using
a
higher
cap
rate.
D
We
do
account
for
one
year
lease
up
versus
the
two
years
that
the
appellant
has
has
stated
in
their
pro
forma.
When
we
look
at
the
rent
roll
analysis
for
this
property
I
would
ask
the
board
to
turn
to
page
six.
D
The
lease
is
in
place
and
you'll
see
exactly
what
rents
were
were
provided
to
us
and
in
2021
assessment.
You'll
see
that
the
the
total
leased
area
is
projecting
a
rent
of
7.5
million.
D
You'll,
see
it
again.
It's
on
page
6
of
97
and
I
didn't
show
that
in
the
last
case-
and
you
know
this
actually
shows
exactly
what
is
reported,
it
shows
exactly
what
should
be
the
potential
for
the
leases
in
place:
7.5
million
41541,
and
that
comes
at
an
average
of
52
dollars
and
three
cents
for
this
property.
And
then,
when
you
look
at
the
the
retail
leases,
you'll
see
East
West,
coffee,
TD,
Bank,
East,
West
coffee
is
paying
67
and
three
cents
for
their
space.
Td
America
TD
Bank
is
73
dollars
and
twelve
cents.
D
D
It
is
a
bit
understated,
I,
believe
you
know,
given
that
you
know
we
have
leases
in
the
building
that
have
rented
for
much
higher,
so
I'd
like
the
board
just
to
pay
attention
to
that
rent
row
and
and
see
exactly
what
rents
are
being
achieved
for
this
property.
With
that
we're
open
for
questions,
thank
you.
J
Yes,
thank
you
so
color
me
just
to
address
some
points
that
the
county
has
made
column
E2.
This
is
Rife
with
errors.
It
double
counts.
Income
by
using
both
rents
received
from
tenants
during
2021
that
then
vacated
during
that
year.
It
then
double
counts
the
income
by
imputing
it
on
vacant
space
as
well.
This
column
also
doesn't
consider
concessions.
The
rent
role
that
Mr
Peralta
cited
to
also
ignores
concessions
in
a
non-uniform
manner.
The
retail
rents
Mr
Peralta
quoted
those
are
the
grossed
up
rents
that
include
pass-through
income.
J
That's
not
the
way
that
the
county
applies.
The
pass-through
income
you
can
see
on
the
summary
page
that
pass
through
is
separate,
reported
separately
so
by
quoting
those
rates,
he's
double
counting
the
income
on
those
tenants.
If
we
remove
the
pass-through
income
from
those
rates,
the
average
is
55.37
the
coffee
Shop's
paying
fifty
dollars
a
square
foot.
The
vacant
space
is
behind
the
coffee
shop.
Now
the
main
issue
again
is
the
other
income
we
do
impute
actual
prior
year.
When
we
know
it's
repeatable
other
income,
not
when
it's
a
one-time
termination
fee.
J
E
I'd
like
to
address
the
retail
space,
it's
too
bad,
the
county
couldn't
respond
appropriately,
couldn't
respond
to
the
appellance
allegation
that
there
was
double
counting
on
the
additional
rent
reimbursement,
real
estate
taxes
and
Cam,
and
all
that
good
stuff,
but
based
on
what
I
know
about
the
rents
around
there
I'm
going
to
conclude
that
the
county
that
the
balance
right
that
the
base
rents
are
in
the
50s.
Although
I
thought
the
bank
would
get
a
better
deal,
be
honest
because
they're
thanks
but
I
I.
E
More
importantly,
it's
clear
to
me
that
the
retail
space
on
the
North
Garfield
side
is
absolutely
worthless
than
the
retail
space
on
the
Wilson
Boulevard
side
for
sure,
and
the
county
has
imputed
the
base
spread
of
54
dollars
for
the
Garfield
side
for,
and
it
says,
10
000
plus
square
feet
of
a
vacant.
E
Oh
I
guess
it's
really:
five
thousand
the
former
Chinese
anyway
I
I
can
redo
the
numbers,
but
I
said
that's
important
base
around
forty
dollars
a
square
foot.
If
the
Wilson
Boulevard
side
is
50,
some
54
5
that
average
of
53
or
four
and
so
I
would
take
Greg's
point
of
view
because
I
think
that's
a
slam
dunk,
that's
just
one
time
payment
and
shouldn't
be
included,
even
though
the
County
said.
Well,
we
smoothed
out
other
stuff
to
make
adjustment
to
me.
This
is
too
obvious.
E
Just
take
it
out
and
then
just
do
what
you
think
is
right
about
the
rest
of
the
the
costs
and
the
income
so
I
agree
with,
but
I
I
again
would
take
down
that
retail
gross
potential
income
to
more
realistic
number.
That's
going
to
be
tough.
I
got
a
lot
of
retailers
who
would
die
before
they
would
set
up
shop
around
the
corner
from
a
primary
artery.
I
mean
you
know,
you
have
to
pay
them
to
go
Justified.
H
E
E
A
A
All
right,
Mr,
pranaronda
or
Mr
Lawson
any
additional
well.
C
A
A
A
J
J
J
The
Supreme
Court
of
Virginia
has
stated
on
multiple
occasions
that
it
is
well
settled
that
a
recent
sale
of
the
subject
property,
while
not
conclusive
in
determining
fair
market
value,
is
entitled
to
substantial
weight,
with
no
significant
changes
in
market
conditions
or
property
operations
between
the
date
of
purchase
and
the
data
value.
The
purchase
price
is
the
best
indication
of
value
for
the
2022
assessment.
J
J
If
we
take
the
2020
noi
and
cap
this
out
that
results
in
a
cap
rate
of
7.2
percent,
you
can
see.
The
county
only
applies
a
6.595
percent
cap
rate,
so
that
could
be
where
the
error
is
the
tenant
who
fully
leases.
This
space
is
one
year
closer
to
their
lease
expiration
in
2026
than
they
were
one
year
prior.
J
J
Not
improved
since
January
1
of
2021,
yet
again
the
assessment
has
increased.
The
September
2021
sale
price
is
entitled
to
substantial
weight
in
the
assessment,
given
that
the
market
valued
the
property
of
196
million
500
000,
it
appears
that
the
County's
cap
rate
is
60
points
lower
than
what
the
market
supports
based
on
this
property's
income.
J
I
Just
that
the
property
was
widely
marketed
for
sale
and
the
fact
that
the
lease
expires
in
five
years
or
a
hundred
percent
of
the
tenant
and
for
100
of
the
building's
net
leasable
area
tends
to
exert
downward
pressure
on
the
value
of
the
property,
even
though
it
is
a
GSA
tenant.
If
that
lease
is
ever
renewed,
the
owner
is
going
to
have
to
spend
a
substantial
amount
of
funds
on
that
renewal
and
the
rental
rate
is
very
likely,
given
the
current
market
to
be
reduced.
I
So
I
think
that
you
know
that
is
was
very
important
in
the
marketing
of
this
property
and
in
the
valuation
of
the
property
in
the
sale.
D
Yes,
thank
you.
As
the
the
appellant
pointed
out,
the
subject
did
sell
in
September
of
last
year.
The
county
feels
that
the
original
assessment
was
pretty
good
as
far
as
what
they
anticipated
to
be
the
income
for
this
property.
D
As
you
see
in
2021
column
e,
this
is
what
they
reported
as
what
they
received:
actual
income,
not
the
potential
income
of
this
property
and
and
that's
what
you've
seen
in
Prior
cases
and
what
you'll
see
in
the
coming
cases,
with
the
remainder
of
the
Year,
this
actual
income
doesn't
depict
exactly
the
potential
of
the
property.
D
In
all
my
cases,
the
actual
income
is
somewhat
misleading.
As
far
as
we're
asking
the
the
owners
to
project
what
the
potential
gross
income
of
a
property
should
be,
that's,
including
vacant
space,
that's
including
all
spaces
included,
that's
including
all
parking
pass-throughs
and
what
they
anticipate
the
the
project
to
achieve.
Now,
when
we
look
at
you
know
our
original
assessment
and
we
can
look
at
the
revision
as
well.
D
We
use
just
that.
We
use
exactly
what
the
rent
roll
is
showing.
We
use
exactly.
You
know
in
this
case
there's
No
Vacancy,
but
we
we
afford
five
percent
vacancy
and
that's
across
the
board,
with
all
projects
that
you
know
are
100
occupied.
D
So
in
the
end
I
mean
we,
we've
changed
our
our
assessment
about
three
million
dollars
compared
to
what
we
had
originally
and
that's
still
within
reason,
from
what
the
the
sale
has
occurred
in
September
of
last
year.
You
know
projecting
forward.
As
Miss
Borman
has
mentioned,
you
still
have
a
tenant
there
for
the
next
five
years,
so
we
believe
the
original
assessment
is
a
fair
assessment,
but
even
more
so
when
we
retested
giving
the
new
information
and
giving
the
information
that
is,
should
be
reported
in
the
INE.
D
You
know
we're
still
within
two
percent,
as
Mr
Harmon
pointed
out
again
projecting
forward,
we
have
a
qualified
tenant
and
it's
they're
there
for
the
next
five
years.
That's
all
I
have
thank
you.
G
Think
one
thing
I
have
a
little
issue
with
is
the
use
of
a
general
office
building
cap
rate
on
this
property,
just
because
it's
a
government
building
and
it's
highly
specialized,
so
how
you
treat
that
you've
got
to
give
more
weight
to
the
sale
price
than
to
Equalization
with
other
cap
rates
for
marketable
multi-tenant,
Office
Buildings,
you
know
we
used
to
be
right
across
the
street
from
this
building
and
I'd
look
at
it
every
day
and
at
the
end
of
the
lease,
depending
on
what
what
you
know
kind
of.
G
What's
what
the
government
wants
to
do,
it's
either
a
fully
vacant
building
or
a
it
becomes
a
you
know,
a
home
run
or
or
it
could
be
a
real
problem.
So
you.
G
If
I
had
a
chance
to
ask
a
question
here
as
I'm
rambling
on
I
wanted
to
know,
because
you
mentioned
five
years
left
on
the
lease
is:
are
there
any
renewal
options
kind
of
baked
in
that
that
lease
that
that
DARPA
has
or
or
is
it
just
a
dead
end,
at
least
renegotiated.
I
At
this
point,
it's
a
dead
end
lease
and
there
is
no
lease
in
place
or
anything
along
those
lines
going
forward
after
that
exploration,.
E
Did
thank
you
through
the
appellant
on
your
on
the
actuals
reported
in
column.
E
could
explain
how
Row
one
office
in
row
six
path
through
pass-throughs
for
a
very,
very,
very
stabilized
building,
could
be
so
much
less
than
the
history
of
the
building.
Yes,.
J
H
Mr
Yates
just
minor
question
to
the
appellant,
the
the
would
you
address
the
parking
that.
A
F
J
Yes,
sir,
so
when
we
were
looking
at
this
property,
we
knew
we
had
a
September
2021
sale.
We
knew
what
the
case
law
states
about
fair
market
value
and
how
an
arm's
length
transaction
is
the
best
indication
of
what
a
fair
market
value
is.
So
then
we
looked
at
the
income
potential
at
this
property
and
we
said
how.
How
is
how
does
this
jibe
with
the
sale
price?
J
J
Then
another
variable
you
can
look
at
instead
of
the
parking
is
the
capitalization
rate,
which
is
more
likely
the
culprit
as
to
why
the
County's
assessment
is
higher
than
the
sales
price
again
just
accounting
for
Market
risk
and
tenancy
risk
that
the
buyer
accounted
for
in
this
in
the
purchase
price
that
the
county
did
not.
H
I
And
Mr
Yates.
You
also
have
to
remember
that
at
the
time
that
this
appeal
is
prepared,
we
had
permission
to
use
what
we
had.
So
we
had
to
get
permission
from
the
prior
owner
to
use
information
other
information,
so
that
was
not
allowable
to
us
when
this
appeal
is
prepared.
D
Yes,
what
was
available
to
the
appellant
when
they
prepared
this
pack?
It
was
the
rent,
roll
and
the
rent.
Roll
clearly
shows
the
parking
income
for
this
property.
Just
wanted
to
clear
that
up
and
then
for
the
cap
rates.
I.
Think
if
you
change
the
cap
rates,
it
would
be
out
of
Equalization
with
the
other
office
buildings
that
are
similarious
similarly
assessed
based
on
effective
age.
D
You
know
our
assessment
originally
was
within
reason,
given
the
sale
price
of
the
property
and
more
so,
our
test
is
within
reason,
given
what
we've
seen
as
far
as
the
projection
projected
income
of
this
property,
so
I
asked
the
board
to
use
the
test
value
as
their
assessment.
Thank
you.
J
J
J
Equalization
requires
uniformity,
take
a
back
seat
to
fair
market
value
and
the
county
had
information
regarding
the
September
2021
sale,
both
at
the
time
that
they
made
the
initial
assessment
and
upon
appeal
they
just
disregarded
it
and
said
no.
We
don't
believe
that
the
market
participants
in
this
sale
valued
this
correctly.
They
should
have
valued
it
higher.
There's
nothing
to
say
that
this
sale
was
not
arm's.
Length
was
not
a
good
sale.
As
such,
it
should
be
reduced
to
at
least
the
sales
price.
Thank
you.
Okay.
H
Obviously,
they're
looking
at
this
building
early
21
summer,
21
in
during
the
pandemic.
How
much
do
you
think
that
impacts
their
assessment
of
what
we
want
to
do
to
buy
it
all.
G
I
mean
I've
seen
this
fire
transactions
from
them
in
the
market
and
they
are
very
often
paying
top
dollar
right.
So
you
go
for
credit,
single
tenant,
government
occupied
credit
facilities
and
they'll
take
a
flyer
on
getting
a
renewal
or
getting
money
from
the
taxpayer
to
renew
down
the
road
which
will
probably
come
up
in
five
years,
but
this
is
a
very
specialized
building
with
our
plan,
so
I.
H
G
G
September
21
it,
it
really
is
yeah
for
this
buyer
and
we
were
talking
about
practically
zero
next
year.
We're
going
to
take
another
look
at
it.
A
G
E
But
just
what
barn
said
we
don't
know
what
the
seller's
motivation
was
to
take.
500,
000
or
5
million
dollar
less,
which
may
have
nothing
which
may
have
not
primarily
have
to
do
with
the
potential
noi
could
be
that
there
that's
just
what
I
was
thinking,
maybe
they're
cap,
they
need
the
cash
it
turns
out.
Barnes
has
an
Insight
that
I
didn't
have,
and
mainly
they
needed
the
cash
and
and
but
you're
inside
Greg.
But
then
these
guys
are
known
to
to
pay
pay
full
board.
E
Personally,
I
think
this
is
a
very
solid
building
with
a
very
solid
tenant
that
is
unaffected
by
coven,
whether
the
the
individual
employees
show
up
at
work
or
not
the
rent's
going
to
be
paid,
but
the
operating
expenses
would
go
down
if
they
don't
show
up.
Finally,
my
bottom
line
is
2.1
percent
difference
between
the
two
is
not
it's
not
definitive.
If
it
were
22
percent
or
say
I'd,
say
well
that
there's
something
very
wrong
here:
somebody's
screwing,
but
this
is
too
close
to
call.
After
all,.
A
Right,
I
guess:
I'm,
going
to
just
jump
in
here,
I
I
tend
to
agree
with
Greg
I
mean
I
I.
Look
at
this
and
think
you
know
what
better
point
to
to
talk
to
tie
this
to,
but
the
sales
price
I
mean
this
didn't
close
in
January
of
last
year
or
March
of
last
year.
It
was
September
and
you
know
the
the
talk
about
the
the
client
leaving
in
five
years.
I
think
we
addressed
that
in
five
years,
because
who
knows
it
could
get
renewed,
it
may
not
get
renewed,
then
we'll
be
looking
at.
A
You
know.
Spending
X
number
of
dollars,
but
I
mean
even
Mr.
Peralta
alluded
to
the
sales
out
there
would,
you
know,
change.
Actually
the
cap
rates
the
sales
that
happened
in
2021.
Well,
this
is
one
of
the
sales,
so
it's
kind
of
like
you
can't
have
your
cake
and
eat
it
too.
Oh
it's
going
to
change
it,
but
in
this
case
you
know
the
sales
price
of
196
million
is
it
was
an
arm's
length
transaction.
It
was
out
there.
You
know
we
never
know
what
the
motivation
of
the
buyer
the
seller
is.
A
F
Not
going
to
go
with
the
sales
price,
the
county
has
to
demonstrate
why
it's
not
arm's
length
and
so.
F
C
Well,
I
thought
that
it's
very
seldom
that
we're
gonna
go
just
because
there
was
a
sale
for
the
sales
price.
You
know
we
normally
we
look
at
all
the
numbers
and
see
mixes
or
that
it's
like
a
previous
case.
You
know
it
sold
that
on
2021,
but
it
sold
a
couple
years
before
we
just
reduced
it
to
94
million,
but
that
was
sold
for
128
million.
You
know
so
it's
does.
It
make
sense
to
really
work
for
the
sales
prices
I'm,
not
sure,
but
that
was
2019.
G
A
G
How
motion
to
reduce
to
the
sales
price
of
196
million
534.
G
A
C
J
A
All
right
does
anybody
have
any
other
business?
A
No,
all
right,
then
we
will
stand
adjourned
here
at
10
42..
We
re-adjourn
next
Tuesday
that
27th,
and
that
is
an
all
virtual
meeting.
So
no
one
needs
to
come
in.
You
can
work
from
your
home,
County
included.